A class action against eight hospitals in Detroit produced a “gotcha-type” e-discovery ruling that unfairly punished the hospitals for trying to cooperate with opposing counsel. Cason-Merenda v. Detroit Medical Center, 2008 WL 2714239 (E.D.Mich. July 7, 2008). Here is Magistrate Judge Donald A. Scheer’s own words at the end of his opinion:
Having elected to martyr itself rather than to seek relief in a timely fashion, DMC seeks an order imposing the cost of its choice upon its opponents. I find neither substantive merit nor equity in its request. IT IS THEREFORE ORDERED that Detroit Medical Center’s Motion to Require Plaintiffs to Share Third Party Vendor Costs of Electronic Discovery is denied.
Judge Scheer held that the defendants had elected to martyr themselves by cooperating with plaintiffs and relying upon a stipulation with plaintiffs. The stipulation reserved the parties rights to do e-discovery first and seek cost-sharing later. Judge Scheer’s use of the inflammatory word “martyr” is ironic, and so is his reliance upon the Sedona Principles to try to justify his ruling. (To pile the irony on even higher, Judge Scheer misspells Sedona throughout the opinion and instead calls it the “Sadona” Conference.) It is ironic because the Sedona Conference’s latest publication is The Sedona Conference® Cooperation Proclamation. The Proclamation encourages parties to reach agreement and specify plans. That is exactly what the defendant hospitals did here, but instead of rewards and accolades, they were punished.
The eight hospitals are indeed martyrs, but not in the self-imposed manner that Judge Scheer’s opinion suggests. They are martyrs to the cause of cooperative e-discovery that the Sedona Conference and many others promote. Their martyrdom was not voluntary as the judge sarcastically suggests. It was caused by opposing counsel and the very judge who labeled them such. Cason-Merenda is bad law, but is nevertheless important. It is significant and deserves attention because it demonstrates that the cooperative approach will not work unless the judiciary understands and supports cooperation in both word and deed.
Defendants Cooperated As They Should
The defendants here met with plaintiffs at the beginning of the case and agreed to certain e-discovery. Instead of reaching an agreement as to cost sharing at this early stage, which is nearly impossible, especially before anybody really knows what the costs will be, both sides agreed to defer the issue of cost sharing. They agreed to reserve their rights to later move for cost sharing. The court then approved the stipulation and made it into an order of the court. After that happened, defendants should have been able to rely on the order, and make production first, without concern of waiver of rights. That is in fact what they did. Only later did they discover that reliance on this court’s order put them on a path to martyrdom.
The six defendant hospitals acted in a cooperative manner to advance the process by doing the e-discovery work required and making the production. The opinion does not set forth any of the details, but in a class action like this, involving six major hospitals, the e-discovery work would almost certainly have been extensive and complicated. It is very hard to predict in advance the cost of this kind of work. That is the practical reason parties should be free to agree to defer this issue.
After defendants first production, when they knew the actual costs, as opposed to speculative predictions, they were then in a position to evaluate whether cost sharing was justified. Apparently they thought it was, and so contacted plaintiffs counsel to try to reach an agreement. When plaintiffs’ counsel would not agree to any cost sharing, defense counsel was forced to seek relief from the court by filing a motion.
These were not the crazed actions of a deluded martyr. Defense counsel was following the cooperative approach built into the rules and modern principles of e-discovery. They should not have been punished for trying to cooperate and work things out before filing motions. At the very least, the court should have provided them with their day in court and heard the issue of whether cost sharing was justified. But that is not what happened in Cason-Merenda.
Instead, the plaintiffs ceased their prior cooperative attitude, and went into full adversarial mode. They not only opposed the motion on its merits, which is certainly fair, but they also challenged defendants right to bring the motion at all. Their procedural objection was unfair and excessive adversarial conduct because it was contrary to their prior agreement. They had agreed that both sides preserved their rights to later seek cost sharing, but when defendants attempted to asset their right, they ignored their agreement. Instead, Plaintiffs pulled out all stops to try to prevent defendants from being heard. They confused the judge with arguments that defendants must have waived their rights to seek cost shifting, and so the judge should not even address the more complicated merits of motion.
At this point, the judge should have put aside plaintiffs’ technical, forget-the-stipulation waiver arguments. He did not. Instead, the adversarial attack worked, and the procedural objections were sustained. What kind of message do you think this sent to the parties in this case?
Defendants Were Unwilling Martyrs
The Court refused to hear the merits and instead denied defendants motion on procedural grounds. Judge Scheer held that defendants should have moved for cost sharing before they incurred the costs. Never mind the stipulation. He held that defendants had waived any right for cost sharing. He called them martyrs who had voluntarily incurred the e-discovery costs, and now, after martyrdom, it was too late to seek any reimbursement or other relief.
Judge Scheer spent most of the decision explaining how the rules and law contemplate the filing of motions for cost sharing before costs are incurred. I think he is right on that point, as a general matter. But in this case, the parties entered into a contrary stipulation and order, and that should have changed everything. It did not, and thus fundamental principles of judicial estoppel were violated. Judge Scheer in effect vacated his prior order after the defendants had relied upon it. By this action, he avoided addressing the complex merits of defendants’ motion for cost sharing and punished them for taking a cooperative track.
At the hearing on defendants’ motion, they protested the plaintiffs’ argument that they had waived their rights. Defense counsel pointed out that they had relied on the stipulation and order. Judge Scheer made short work of that argument in his written opinion by pointing to a provision in his scheduling order that required parties to file discovery motions within 14 days after a discovery dispute arises. He held this provision trumped the stipulated order. He determined, based on an affidavit filed by one of the plaintiffs’ attorneys, that a discovery dispute existed between the parties on cost sharing no later than April 4, 2008. The defendants kept trying to resolve their dispute without judicial intervention after that date and did not file a motion until May 20, 2008. That was too late according to Judge Scheer, who, at the urging of plaintiffs’ counsel, determined that the deadline was April 28th.
Fortunately, I rarely see this kind of hyper-technical “gotcha-type” ruling in U.S. District Courts. They may make that kind of observation about questionable timeliness, but then they usually go on to address the merits of the motion. This was not done here. The judge refused to even consider or engage in any type of reasoned evaluation as to whether cost shifting was justified.
Martyrs to the Cause of Cooperation
Defendants here are true involuntary martyrs, worthy of admiration. They followed exactly the kind of collaborative process contemplated by the new Rules, specifically Rule 26(f), Federal Rules of Civil Procedure. It is also the kind of cooperative arrangement contemplated by the Sedona Conference in its latest publication: The Sedona Conference® Cooperation Proclamation. The Proclamation encourages attorneys, parties, and judges to move away from traditional adversarial models of discovery into more cost effective and balanced collaborative approaches. The cooperative model Sedona promotes follows the new rules and encourages parties to reach agreement and specify plans. Here is the introduction from the Cooperation Proclamation:
The costs associated with adversarial conduct in pre-trial discovery have become a serious burden to the American judicial system. This burden rises significantly in discovery of electronically stored information (“ESI”). In addition to rising monetary costs, courts have seen escalating motion practice, overreaching, obstruction, and extensive, but unproductive discovery disputes – in some cases precluding adjudication on the merits altogether – when parties treat the discovery process in an adversarial manner.
The Sedona Proclamation goes on to explain how cooperative discovery is not only an economic imperative, but also an ethical one.
Cooperation in Discovery is Consistent with Zealous Advocacy.
Lawyers have twin duties of loyalty: While they are retained to be zealous advocates for their clients, they bear a professional obligation to conduct discovery in a diligent and candid manner. Their combined duty is to strive in the best interests of their clients to achieve the best results at a reasonable cost, with integrity and candor as officers of the court. Cooperation does not conflict with the advancement of their clients’ interests – it enhances it. Only when lawyers confuse advocacy with adversarial conduct are these twin duties in conflict.
Lawyers preparing cases for trial need to focus on the full cost of their efforts – temporal, monetary, and human. Indeed, all stakeholders in the system – judges, lawyers, clients, and the general public – have an interest in establishing a culture of cooperation in the discovery process. Over-contentious discovery is a cost that has outstripped any advantage in the face of ESI and the data deluge. It is not in anyone’s interest to waste resources on unnecessary disputes, and the legal system is strained by “gamesmanship” or “hiding the ball,” to no practical effect.
The effort to change the culture of discovery from adversarial conduct to cooperation is not utopian. It is, instead, an exercise in economy and logic. Establishing a culture of cooperation will channel valuable advocacy skills toward interpreting the facts and arguing the appropriate application of law.
But what happens when one side cooperates and the other does not? As this case shows, it can be dangerous. “Turn the other cheek” may be a noble thought, but it will not work in litigation. The Sedona Cooperation Proclamation notes this common problem at page 2:
And there remain obstreperous counsel with no interest in cooperation, leaving even the best-intentioned to wonder if “playing fair” is worth it.
They note the problem, but offer no solution, at least not in this short proclamation. The only solution I know of is to try to turn the aggression on the attacker, a kind of aikido-like maneuver that I discussed in Adversarial Search, a “Perfect Barrier” to Cost Effective e-Discovery, and One Litigant’s “Aikido-like” Response. That is exactly what the eight hospitals did in Cason-Merenda, but instead of stepping in, the judge stepped out. The judge should have rewarded the good behavior; he should have at least considered the defendants’ motion. Instead, he fell hook, line, and sinker for the plaintiffs’ adversarial gamesmanship and joined in the attack. He even added insult to injury by calling defendants martyrs; all while invoking the ironic name of “Sadona.” Sad indeed!
Cason-Merenda is important because it shows that the collaborative approach embodied by the Sedona Proclamation will not work without the active support and participation of the judiciary. Unless judges encourage and support the collaborative model, the presence of one obstreperous counsel in a case will act like a rotten apple in a barrel. I know that Sedona understands this well. In fact, on October 7, 2008, they are having a “virtual press conference” wherein they will release a list of state and federal judges who have endorsed the Proclamation. Be on the lookout for this. The courtrooms of these judges should be martyr-free zones.
The Cooperation Proclamation calls the move from adversarial to cooperative discovery a fundamental paradigm shift. Sedonda thinks we can get there by a three part process:
Part I: Awareness – Promoting awareness of the need and advantages of cooperation, coupled with a call to action. This process has been initiated by The Sedona Conference® Cooperation Proclamation.
Part II: Commitment – Developing a detailed understanding and full articulation of the issues and changes needed to obtain cooperative fact-finding. This will take the form of a “Case for Cooperation” which will reflect viewpoints of all legal system stakeholders. It will incorporate disciplines outside the law, aiming to understand the separate and sometimes conflicting interests and motivations of judges, mediators and arbitrators, plaintiff and defense counsel, individual and corporate clients, technical consultants and litigation support providers, and the public at large.
Part III: Tools– Developing and distributing practical “toolkits” to train and support lawyers, judges, other professionals, and students in techniques of discovery cooperation, collaboration, and transparency. Components will include training programs tailored to each stakeholder; a clearinghouse of practical resources, including form agreements, case management orders, discovery protocols, etc.; court-annexed e-discovery ADR with qualified counselors and mediators, available to assist parties of limited means; guides for judges faced with motions for sanctions; law school programs to train students in the technical, legal, and cooperative aspects of e-discovery; and programs to assist individuals and businesses with basic e-record management, in an effort to avoid discovery problems altogether.
The Proclamation came too late for the hospital defendants in Cason-Merenda. But hopefully their martyrdom will not be in vain. Cason-Merenda should drive home the point that judiciary buy-in and training is paramount to this movement’s success.
Judges must not allow themselves to be duped into punishing parties who try to cooperate. They should not reward traditional gamesmanship. They should be trained to see through the clever smoke screens that experienced litigators can emit. If they are not sure, they should err on the side of ruling with the lawyers that cooperated. Hyper-technical “gotcha” litigation has no place in cooperative e-discovery. It should not be tolerated by the lawyers or the judges. If a District Court Judge sees a Magistrate ruling like Cason-Merenda, they should not hesitate to reverse it.
I think this analysis ignores the simple reality that one form of “gotcha” tactics is to proceed with processing and production of ostensibly not reasonably accessible ESI without affording the requesting party the opportunity to examine the support for the not reasonably accessible assertion. There may be less expensive alternatives available, such as reading the header information without fully restoring the tapes, that could reduce the burden on both sides or even make clear to the requesting party that the likelihood of obtaining relevant, responsive information is less than the requesting party originally believed. Proceeding with production and attempting to shift costs without affording the requesting party the opportunity to reach an informed compromise is the antithesis of the cooperation The Sedona Conference works to encourage. As Judge Scheer noted:
“Rather than raising the issue of undue burden and cost before they were incurred, when there would have been an opportunity for the court to demand a showing of good cause by the requesting party, explore alternatives, impose conditions or otherwise encourage compromise, DMC elected to suffer the expense and only then seek contribution from the Plaintiffs.”
I enjoyed the article very much but I do agree with my esteemed colleague Conor Crowley’s statement. The plaintiff should certainly have a role in the costs being incurred, and the data being searched, if they are to expected to share in the costs of such production.
In addition, if the defendant’s are going to assert that certain ESI data is not readily accessible, under the definitions of FRCP Rule 34, they need to demonstrate a good faith basis for such assertion.
Although I do take issue with the improper reference to the Sedona Conference, as I am sure the people of Arizona do.
We do not know whether the requesting party was afforded the opportunities Conor Crowley mentions, or not. All we know is that the requesting party stipulated to considering shifting after the fact, and the court approved and adopted the stipulation. That is my real point here. Nothing forced the requesting party to stipulate, but once they did, and the other side relied on it, it should have been a done deal.
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